Annual Financial Report for the period from 1st of January to the 31st of December 2012
27
Metallurgy and Mining Sector
Metal prices in 2012 varied between 1.793 and 2.308 $/tn. Similarly the €/$ exchange rate presented signifi-
cant variability, between 1,21 and 1,35. Particularly between end-February and August, a clear downturn pre-
vailed with respect to aluminum prices, combined with a strengthening of dollar with respect to euro, as the
concern regarding escalation of the Eurozone crisis adversely influenced the common currency.
The mean aluminum value for 2012 was set to 2,081 $/tn, dropping by 15,7% compare to the preceding year,
experiencing a two-year low in mid-August, followed by a slight recovery during the 4th Quarter.
Global aluminum consumption continued its increasing trend (+4,5%) for a second successive year; this is
driven by strong demand from developing economies. In contrast, in Europe, the aluminum consumption ex-
perienced negative rates.
Despite the 4th Quarter recovery, LME values remain feeble and are at odds with the fundamental market
conditions. In contrast to LME values, premia were set at particularly high levels, a fact reflecting the lack of
available metal for immediate use. The high cost of energy maintains intense cost pressures, presenting major
challenges for energy cost-intensive aluminum producers.
Under this framework, the Group prioritizes the strict control and restriction of production operational cost,
aiming at improving the competitive position of «Aluminium of Greece». The satisfactory progress of the com-
petitiveness recovery program «MELLON» is already reflected on the financial performance of the Division for
the 2nd half of 2012, which exhibits remarkable improvement compared to the 1st half of the same year. In
particular, by the end of 2012 Aluminium S.A. has identified actions under the «MELLON» program that ac-
count for above 80% of the final cost saving target of the aforesaid program. The full
acknowledge of this gain in the financial results of ‘Aluminium S.A.’ and the Group has already started in 2012.
Its progressive completion is anticipated within 2013. Nevertheless it must be noted that, with frequency to
these initiatives, finalization of the arbitration between Aluminium S.A. and PPC to definitely set the cost of
electric power may positively or adversely influence the gains from these initiatives by approximately 33%.
Construction Sector (ΕPC).
Τ2012 was the fifth consecutive recession year for the Hellenic Economy; the cumulative GDP reduction is al-
most 20%. The conditions prevailing for the most part of the year resulted in the further worsening of the local
financial conditions, with direct adverse impact to entrepreneurship.
Several months of negotiation with the troika (tripartite committee) and the two parliamentary elections - un-
der especially tense political and financial conditions - maintained a high level of uncertainty for the nation’s
future and prospects. The international distrust against Greece experienced a peak, while the domestic bank-
ing system was found completely unable to finance productive activities.
It is fact that positive developments of the latest two months created well founded expectations for reversing
the climate, to the extent that these shook off the risk of exiting the euro and confirmed the intent of Europe
and Greece so that the country remains a euro country. However, exiting the crisis is still barely in sight.
